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Is there room in the industry for both open source software, which lets users view and tinker with a program’s source code, as well as proprietary software? This question and related ones were asked at a conference held in Washington Friday, where panelists discussed the pros and cons of different software licensing models and whether the U.S. government should get involved in the debate.

The panel was stocked with an economist, a researcher, a professor, and a representative from Microsoft Corp.– all invited to participate by hosts the American Enterprise Institute (AEI) and the Brookings Institution, two organizations that analyze the impact of government regulation on the economy. But audience member Richard Stallman, president of the Free Software Foundation, nearly stole the panel’s thunder as he grabbed a microphone during the question and answer period and attempted to commandeer the conference to address what he described as mischaracterizations the panel made about the free software movement. Stallman had not been invited as a panelist.

There are actually three software licensing models in use today, explained panelist Lawrence Lessig, a professor at Stanford University. There is proprietary software, which shields a program’s source code from the licensee; open source software that lets the user view the source code and make changes to it; and general public license (GPL) software that adds a restriction to the open source license saying any modifications made to the source code must then also be made freely available. The GPL model was developed by Stallman.

While Lessig argued that each licensing model has validity, he said that some commercial software vendors take issue with GPL’s condition that would force them to make their modifications to the code — as well as the original software — available for free, since that would jeopardize the companies’ ability to sell software with their additions. For example, if a piece of software that emerged from government research was made available to the industry under a GPL license, many software vendors would not be able to base their own programs on it because that would expose their source code to the general public.

“When software is distributed under GPL, it’s impossible for a private company to commercialize or incorporate any of that work” into their own products, said panelist Brad Smith, senior vice-president and deputy general counsel with Microsoft, since the company would have to charge for its software while others would be allowed to distribute it for free.”Our point is if you’re going to license software under GPL, it’s important to appreciate the ramifications on the diversity of the software ecosystem.”

Another panelist said that open source software such as the Apache Web server has found success because it contains enhancements and modifications from all sorts of different developers. “Even though it’s not GPL, people don’t want to take (Apache) private, they want to contribute back,” said Jim Bessen, director of Research on Innovation, a nonprofit group that promotes research on technological innovation. “There are a lot of economic reasons not to take it private,” such as reaping the benefits of others’ input, he said.

In some countries, governments are jumping into the debate on the side of open source software, said panel moderator Bob Hahn, director of the AEI-Brookings Joint Center for Regulatory Studies. In Singapore, for example, the government is subsidizing open source software’s production and use, he said. The U.S. government ought to pick the best product for the job, be it open source or proprietary, said David Evans, senior vice-president with National Economic Research Associates, an economic consulting firm. There isn’t a “market failure” in the software industry that the government needs to fix by supporting open source software, he said, and the top firms in the industry are changing all the time.

“The industry over (the past) 20 to 25 years doesn’t seem to be screaming out for government meddling,” Evans said. “Politicians just aren’t very good at picking technology, markets are.”

Using this market failure test to determine whether or not the government should commit to open source software is one of the topics that Free Software Foundation’s Stallman took issue with. “These questions regarding market failure, I don’t think it matters. Injustice, that’s what matters, ” Stallman told the panel and the audience. Debating over whether “the market is working or not misses the whole point of freedom,” he said.

Stallman also disputed Bessen’s earlier comments criticizing the press for characterizing free software advocates as free love idealists of the 1960s. Stallman said that, in fact, the groups have similarities. “We’re demanding freedom,” he said.

Despite the discussion of whether or not the U.S. government should get involved in the software industry, Bessen maintained that it already has, since it is in charge of awarding patents for software. Until the mid-1980s, software was protected under copyright law. The government then transferred software to fall under patent protection, and also lowered the standards for awarding patents, he said. This has resulted in the government handing out around 20,000 patents a year for software, he said. Because software patents are so broad and the technology so intricate, it’s very difficult for a software company to determine whether its product violates another software company’s patent, Bessen said.

Other panelists agreed that there are too many patents awarded and that the U.S. Patent Office is in need of revamping.